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This is the Kodak Moment for the Auto Industry

Plug-In Drivers Not Missin' the Piston Electric vehicles are here to stay. Their market acceptance is currently small but growing...

Sunday, October 23, 2022

Can You Hate Musk and Love Tesla?


I recently posted a story called "No Good Choices" about a friend who's shopping for an EV and he has dismissed Tesla as an option because he "does not like Musk's shenanigans on Twitter." During the discussion, I started defending Musk and it seemed like this was just causing a backfire effect, making him to further entrench in his disdain for the man. Clearly, a different tactic was needed. 

This got me wondering, how many other companies does he apply this "do I like the CEO" metric to? Does he research the CEO of Coke or Pepsi before having a cola? Does he look into the actions of Frito-Lay's president before eating Doritos? Probably not, but he's not required to do so.

Musk has leveraged his position to achieve a level of fame that few CEOs have achieved. This public image is, however, a two-edged sword. Combine this notoriety with Musk's unapologetic insolent Twitter persona and he is going to rub some people the wrong way.

So how did we get here?

I would argue that a personality like Musk's is the only type of leader that could have pulled off taking Tesla from zero to the big success that it is currently. A decade ago, Tesla's success was far from assured. It takes someone as stubborn and insolent as Musk to keep moving forward with a vision while the majority of the experts are saying that it is impossible and it's doomed to fail. When the experts repeatedly say there's no demand, when suppliers won't return your calls, when you have to risk your entire fortune to make payroll and build parts in-house because there's no other way to get completed cars out the door, you have to be obstinate to your core. When this was a requirement for success, to now expect Musk to be a "chill normal dude" is unrealistic. The trials that Tesla has faced nearly guarantee that the person at the head of the company will be obdurate.

This is not to excuse his behavior or to dismiss how some people may feel about his tweets. So what to do about the people that are triggered by Musk's online persona? Just give up on them? No. Anyone shopping for a car (or anything else), should buy a product that will meet their needs and bring them joy. If buying a Tesla would make someone feel like they are endorsing things that Musk has said that they don't agree with, then a Tesla would not bring them joy and they should buy something else. There are plenty of other people willing to buy Tesla's vehicles and there are EVs out there from other car companies that need customers too. However... 

I'd like to present the case that anyone shopping for an EV should buy the product that best fits their personal needs. Regardless of the company's history or the leadership. It is perfectly fine to buy a Tesla and disagree with Musk. Despite what you may have heard (and the behavior of some owners), it is not. a. cult.

When you are shopping for an EV, look at your budget, your requirements for range, passenger room, cargo space, recharging time, charging locations/network, performance, style...  and then buy the car that best fits your needs and budget; Tesla or not.

Should you avoid buying an EV from Volkswagen today because of the company's role in WWII or because of Diesel-gate? I'm sure there are people that avoid VW for these reasons and others. However, I would argue that buying an EV from VW is encouraging them to do the right thing going forward. It helps them put their Diesel products into their past. Look closely into any large company and you'll certainly find blemishes.

The real problem, IMHO, is not what someone tweeted yesterday, but our worldwide use of fossil fuels. Any EV placed in service today is one gas car off the road. As more and more renewable energy sources are added to the grid, these EVs become powered by those renewable sources. The transition of the world's vehicle fleet will take decades. We need to move quickly to a future free from fossil fuels. The transition of the world's electrical grids to 100% renewable will take decades. These decades-long transitions are time that we may not have to avoid the worst impacts of climate change. I find the fretting about who tweeted what about who to be rearranging deckchairs on the Titanic as it's sinking. 

Saturday, October 15, 2022

Electric Vehicles "No Good Choices"


A friend of mine is a longtime Saturn car fan. He's currently in the market for an EV. The Saturn badge has been defunct for over a decade, so that's not an option for him. I pointed out that Saturn was a GM brand and asked if he had considered other GM EVs. He said Saturn was not just another GM brand, it was special and his love for Saturn doesn't extend to Chevy or the other GM badges.

Since he's shopping for an EV, we noted that Saturn has a special place in the history of electric vehicles; in the late 1990s, Saturn dealerships sold leased and delivered the GM EV1.


The GM EV1 was the vanguard of the 1990s EV generation (but that ended poorly).

Given this history and his love for the Saturn brand, his wish is that GM would bring Saturn back as an electric-only brand. This is an interesting idea, but unfortunately for him, it seems very unlikely.

Since he wants an EV soon (and a Saturn EV is not an option), I asked him, "What car are you going to buy?" His response surprised me. 

He said something to the effect of: 

There are no good choices. 

I don't like Musk's shenanigans, so Tesla is off the table. I don't want a Ford or a Chevy; they are truck companies that occasionally make cars. I considered VW but I have ethical concerns supporting the perpetrators of diesel-gate and monkey killing.

There are start-ups making EVs, but I want a company that I know will be around in 5 years for service and parts. 

I interjected that there's no guarantee that any company will still be around in 5 years. He agreed but said the bigger companies are more likely to get a bailout if they are in hot water.

I told him that I think he's letting the perfect be the enemy of the good and that any of the above EV choices would be better than continuing to drive a gas car. He agreed, but that didn't help him land on a choice.

A lot of my friends, family, and coworkers know that I'm into EVs and they often consult with me when they are considering an EV. Usually, the questions are about range, charging at home or on the go... He had researched all of that and understood it well. This was a different sort of ideological EV-hesitancy that I haven't encountered before.

His quest for a 'good choice' continues. We'll see which of the "imperfect" vehicles he eventually buys and I'll be sure to let you know here.

Monday, October 3, 2022

Will Tesla Hit 2 Million Cars in 2022?



2 Million in 2022 has a nice ring to it, but is it possible?

Tesla just released the Q3 production and sales numbers. Sales rose 35% compared to Q2. Giga Shanghai has moved past COVID restrictions and supply chain issues. Even with the significant sales increase, the numbers fell short of some Wall Street estimates. 

Year-to-date Tesla has manufactured 929,910 vehicles; nearly matching 2021's 930,422 (with 3 months still left to go). Tesla has given guidance of 50% annual growth. They will need a strong finish to the year to hit this forecast. 

A 50% increase over 2021's production is 1.4 million vehicles. To reach this mark, Tesla will need to manufacture 466 thousand vehicles in the remainder of the year. That would be 100 thousand more vehicles than they have ever produced in a single quarter; challenging, but not impossible.


As you can see in the chart above, Tesla's production has been growing exponentially. Q1 and Q2 of this year are outliers in that they are flat and down respectively. Q3'22 brings production back inline with the trend. However, Q1 & 2 will still be a drag on the annual production that will be difficult for Q4 to overcome. 

The titular question of this article is "Will Tesla produce 2 million vehicles in 2022?" To achieve this, they would need to produce 1 million cars in Q4. That's more than Q1, 2, and 3 of this year combined. I have no doubt that Tesla will (at some point) be producing one million vehicles per quarter, but that will not be this year. So the answer to the titular question is sadly 'no.' 

On the positive side, Giga Austin and Giga Berlin are both ramping production and should be able to contribute more than 60 thousand vehicles in Q4. Adding this to ~400 thousand that Fremont and Shanghai will produce and Tesla's goal of 1.4 million vehicles this year is within grasp, barring any force majeure events. 

Disclosure: I am long Tesla

Sunday, October 2, 2022

Smart Thermostat vs Smart Battery


Our local electric utility has two programs with similar intentions to reduce grid load during times of high demand. We are participating in both and, sometimes, the two don't really work well together. 

Program 1: Energy Rush Hour

Our utility, Portland General, offers a program they call "Energy Rush Hour." This program attempts to alleviate the strain that air conditioning places on the grid during hot summer days. 

When people arrive home from work, they typically turn on the AC and with everyone turning on their AC around the same time, the grid load is very high during these hours (4 to 7 PM). Energy Rush Hour reduces this strain by pre-cooling participating homes. Pre-cooling typically starts at 3PM. This means that by 4PM when other homes are turning on their AC, the pre-cooled homes can shut off their AC. This spreads out the load. 

If the load wasn't spread out, then the utility might need to use peaker plants to supply the excessive short term energy need. Spreading out the load allows the existing generation infrastructure to fulfill the cooling power demand. Avoiding peaker use is good for the customers, the utility, and the environment. Peaker plants are among the most polluting energy sources and the most expensive source to operate. The cost to run these peakers is certainly passed on to customers in one form or another.

Any month that you participate in an Energy Rush Hour, you receive a $25 incentive bonus on your electricity bill. This more than makes up for an extra electricity use that you may have for having the AC kick on an hour or two early. 

So far, so good; let's look at the second program. 


Program 2: Home Battery w/ Time-of-Use

By default, residential PGE customers are on a flat rate fee structure. With a flat rate, it does not matter what time of day you use electricity; it's the same cost at 3PM as it is at 3AM. This is convenient since you can run your appliances at anytime of day or night and not get hit with higher fees. However, this default flat rate schedule is blind to the ebb and flow of grid demands.  

If you want people to understand something, put a price on it. This is what a Time-of-Use (TOU) rate schedule does. When there's typically surplus supply on the grid (such as overnight), you make the price cheaper to encourage use. And when demand is expected to be high (when hordes of people come home from work and turn on their AC), you make prices higher. PGE's TOU schedule has three rates: peak, mid-peak, and off-peak.

TOU nudges people to push loads into non-peak times. Much like the Energy Rush Hour program, this reduces the demand during peak hours and can avoid or reduce the need for peaker generation. 

We signed up for the TOU program because the off-peak rate is less than half of the flat rate fee. Our solar panels are able to offset most of our usage that's not off-peak and with the home batteries, we can time-shift our solar to make sure that we are effectively off grid during peak times. So we're reducing grid strain and saving on our electricity bill.

Where it Goes Wrong - The Interaction - 

Now you understand the two programs. On their own they work great, but mixing the two doesn't always provide the desired result. Since we're using our home battery to effectively go off-grid during peak hours (3PM till 8PM), tweaking our AC settings to reduce energy use from 4PM till 7PM has absolutely no impact on the grid. In fact the pre-cooling could result in over-all more energy use. This is fine when the power is coming from the grid. Using a little more during mid-peak to reduce the peak usage is certainly worth it. However, when our home battery is the energy source, optimal operation is more important than when it's used.

This is a subtle, second-order effect and I'm sure there are very few people in the PGE service region with batteries, on TOU, and enrolled in the Energy Rush Hour; so I'm not suggesting any immediate changes to either of the programs, but as more homes install battery systems, it will be something for the folks at PGE to consider. Perhaps the next generation Energy Rush Hour program will be aware of customers that have home batteries and have slightly different behaviors when homes that are battery-powered rather than grid-powered. If both the battery and the AC were managed under the same program, the coordination of the two could work much better. 

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